ACDC

The following discussion and analysis of our financial condition and results of operations should be in conjunction with our unaudited condensed consolidated financial statements and the related notes thereto included in this Quarterly Report, as well as our Annual Report. Overview We are a vertically integrated and innovation-driven energy services holding company providing hydraulic fracturing, proppant production, other completion services and other complementary products and services to leading upstream oil and natural gas companies engaged in the exploration and production (“E&P”) of North American unconventional oil and natural gas resources. We operate in four reportable business segments: Stimulation Services, Proppant Production, Manufacturing and Flotek. Our Stimulation Services segment, which primarily relates to ProFrac LLC, owns and operates a fleet of mobile hydraulic fracturing units and other auxiliary equipment that generates revenue by providing stimulation services to our customers. Our Proppant Production segment, which primarily relates to Alpine, provides proppant to oilfield service providers and E&P companies. Our Manufacturing segment sells products such as high horsepower pumps, valves, piping, swivels, large-bore manifold systems, and fluid ends. Flotek is a leading chemistry and data technology company focused on servicing the E&P industry. Summary Financial Results •Total revenue for the three months and six months ended June 30, 2026 was $498.1 million and $947.7 million, respectively, which represented decreases of $3.8 million and $154.5 million, respectively, from the same periods in 2025. •Net loss attributable to ProFrac Holding Corp. for the three months and six months ended June 30, 2026 was $79.7 million and $163.2 million, respectively, which represented a decrease in net loss of $28.3 million and an increase of net loss of $37.7 million, respectively, from the same periods in 2025. •Cash provided by operating activities for the six months ended June 30, 2026, was $32.2 million, a decrease of $103.2 million from the same period in 2025. •Total principal amount of long-term debt was $1,102.4 million at June 30, 2026, an increase of $54.3 million from December 31, 2025. 2026 Developments In January 2026, ProFrac Holdings II, LLC issued an additional $25.0 million aggregate principal amount of its 2029 Senior Notes at par to Beal Bank USA in a private placement to fund capital expenditures with any remaining proceeds used for general corporate purposes. These notes were issued as additional notes pursuant to the original indenture as amended. These new notes and the notes previously issued under the indenture are treated as a single series of securities under the indenture and the new notes have substantially identical terms, other than the issue date, issue price and first payment date, as the existing notes and are secured by a security interest in the same collateral. On March 3, 2026, we entered into an amendment to the 2022 ABL Credit Facility pursuant to which, among other changes, (a) the maximum availability under the facility was reduced to $275.0 million, (b) the scheduled maturity date of the facility was extended six months to September 3, 2027, (c) the applicable margin for SOFR rate loans was revised to range from 1.75% to 2.25%, subject to step-ups of 0.25% at three month intervals following the amendment effective date, up to a range from 3.00% to 3.50%, (d) the unused line fee was revised to 0.375% at all times, (e) certain negative covenant exceptions were curtailed or removed and (f) the $15.0 million minimum liquidity covenant was replaced with a $45.0 million minimum availability covenant. On July 1, 2026, we entered into a new credit agreement with Eclipse Business Capital LLC, as agent, collateral agent, swingline lender, lead arranger and bookrunner, providing for a $300 million asset-based revolving credit facility, which refinanced and replaced our 2022 ABL Credit Facility. See “Note 14. Subsequent Events” in the notes to our unaudited condensed consolidated financial statements for more information regarding our new revolving credit facility. 26 On August 6, 2026, the Company announced that Ladd Wilks has resigned as Chief Executive Officer of the Company, effective Friday, August 7, 2026. He will continue to serve the Company as a newly appointed member of the Board of Directors, replacing Mr. Sergei Krylov. The Company also announced that Matt Wilks has been named Chief Executive Officer of the Company, effective August 7, 2026. He will continue to serve as Executive Chairman. Mr. Krylov’s resignation is not the result of any disagreement with the Company on any matter. Recent Trends and Outlook Our business depends on the willingness of E&P companies to make expenditures to explore for, develop, and produce oil and natural gas in the United States. The willingness of E&P companies to undertake these activities is predominantly influenced by current and expected future prices for oil and natural gas. Adverse weather impacted our results early in the first quarter of 2026. In the second quarter of 2026, oil commodity prices were higher than their average in the first quarter of 2026 with increased volatility. We currently expect increased pricing for our Stimulation Services business in the third quarter of 2026, compared to the second quarter of 2026. We have observed increased customer demand for hydraulic fracturing equipment that can operate with fuel other than diesel as well as a reduced supply of this equipment due to industry attrition. While we have limited visibility for future demand for our products and services, we are encouraged by current market dynamics and increasing customer engagement around 2027 planning. In the second half of 2025, we implemented initiatives to enhance the resiliency of the platform resulting in lower cash operating expenses and capital expenditures. We remain focused on financial and operational discipline and optimizing our asset base. We actively monitor the effects of inflation and tariffs on our business; however, the potential effects of inflation and tariffs on our business remain uncertain at this time. Results of Operations Revenues Revenues by reportable segment are as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues Stimulation services $ 429.5 $ 432.0 $ 836.5 $ 956.5 Proppant production 121.3 77.5 240.9 144.8 Manufacturing 47.8 55.8 96.2 121.6 Flotek 101.8 59.8 174.1 116.6 Other 3.6 5.2 6.5 10.6 Eliminations (205.9 ) (128.4 ) (406.5 ) (247.9 ) Total revenues $ 498.1 $ 501.9 $ 947.7 $ 1,102.2 Stimulation Services. Stimulation Services revenues for the three and six months ended June 30, 2026 decreased $2.5 million and $120.0 million, or 1% and 13%, respectively, from the same periods in 2025. The decreases were primarily due to decreases in average active fleets and lower average pricing for our services in 2026 compared to the same periods in 2025. The decreases were also due to cold weather related work disruptions in January 2026. These decreases were partially offset by an increase in jobs where we supplied proppant and chemistry. Proppant Production. Proppant Production revenues for the three and six months ended June 30, 2026 increased $43.8 million and $96.1 million, or 57% and 66%, respectively, from the same periods in 2025. The increase was primarily due to higher average pricing for our proppant in 2026 compared to the same periods last year, which was due to a shift in intercompany sales mix from mine-gate pricing to wellsite pricing that began in the second quarter of 2025. 27 Additionally, revenue recognized for the amortization of acquired off-market contracts for the three and six months ended June 30, 2026 was zero, compared to $1.9 million and $7.6 million in the same periods in 2025. Refer to Item 8 "Financial Statements and Supplementary Data" in our Annual Report for information about our acquired contract liabilities. During the three and six months ended June 30, 2026, approximately 87% and 88%, respectively, of the Proppant Production segment's revenues were intercompany, compared with 58% and 48% in the same periods in 2025. Manufacturing. Manufacturing revenues for the three and six months ended June 30, 2026 decreased by $8.0 million and $25.4 million, or 14% and 21% respectively from the same periods in 2025. The decrease was due to decreased intercompany demand for manufacturing products. During the three and six months ended June 30, 2026, approximately 82% and 84%, respectively, of the Manufacturing segment's revenues were intercompany, compared with 78% and 83% in the same periods in 2025. Flotek. Flotek revenues for the three and six months ended June 30, 2026 increased by $42.0 million and $57.5 million, or 70% and 49%, from the same periods in 2025. The increase was primarily due to increased volume of intercompany sales to the Stimulation Services segment and increased sales to external customers. Flotek recorded contract shortfall revenue for the three and six months ended June 30, 2026 of $1.2 and $3.9, compared to $7.7 million and $15.2 million in the same periods in 2025, related to contract shortfalls with the Stimulation Services segment. During the three and six months ended June 30, 2026, approximately 58% and 65% of Flotek revenues were intercompany, compared with 58% and 58% in the same periods in 2025. Other. Other revenues for the three and six months ended June 30, 2026 decreased by $1.6 million and $4.1 million from the same periods in 2025. The decrease was due to lower intercompany sales for Livewire. During the three and six months ended June 30, 2026, approximately 100% and 100%, respectively, of other revenues were intercompany, compared with 100% and 99% in the same periods in 2025. Cost of Revenues Cost of revenues by reportable segment is as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenues, exclusive of depreciation, depletion, and amortization: Stimulation services $ 365.7 $ 350.2 $ 715.0 $ 738.0 Proppant production 109.8 57.6 218.3 100.8 Manufacturing 38.6 43.6 76.7 98.9 Flotek 74.9 43.6 128.5 86.1 Other 3.2 5.1 6.2 10.1 Eliminations (204.1 ) (125.4 ) (402.2 ) (239.8 ) Total cost of revenues, exclusive of depreciation, depletion, and amortization $ 388.1 $ 374.7 $ 742.5 $ 794.1 Stimulation Services. Stimulation Services cost of revenues for the three and six months ended June 30, 2026 increased by $15.5 million and decreased $23.0 million, or 4% and 3%, respectively, from the same periods in 2025. These changes were due to a decrease in average active fleets in 2026 compared to the same periods last year. These decreases were offset by an increase in jobs where we supplied proppant and chemistry. Cost of revenues for this segment included intercompany supply commitment charges of $1.2 million and $7.7 million for the three months ended June 30, 2026 and 2025, respectively, and $3.9 million and $15.2 million for the six months ended June 30, 2026 and 2025, respectively, because the Stimulation Services segment did not purchase the minimum contractual commitment of chemistry products from Flotek. Proppant Production. Proppant Production cost of revenues for the three and six months ended June 30, 2026 increased by $52.2 million and $117.5 million, or 91% and 117%, respectively, from the same periods in 2025. These increases were primarily due to increased costs to support the shift in intercompany sales mix from mine-gate pricing to wellsite pricing, which began in the second quarter of 2025. Additionally, costs of revenues also increased due to a mix shift towards brokered volumes in 2026. 28 Manufacturing. Manufacturing cost of revenues for the three and six months ended June 30, 2026 decreased by $5.0 million and $22.2 million, or 11% and 22%, respectively, from the same periods in 2025. These decreases were due to decreased volumes of products sold to intercompany customers in 2026. Flotek.. Flotek cost of revenues for the three and six months ended June 30, 2026 increased by $31.3 million and $42.4 million, or 72% and 49%, respectively, from the same periods in 2025. These increases were primarily due to increased volumes of intercompany sales and sales to external customers. Other. Other cost of revenues for the three and six months ended June 30, 2026 decreased by $1.9 million and $3.9 million, or 37% and 39%, respectively, from the same periods in 2025. The decrease was due to lower intercompany sales for Livewire. Selling, General and Administrative Selling, general and administrative expenses are comprised of the following: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Selling, general and administrative: Selling, general and administrative, excluding stock-based compensation $ 40.6 $ 49.4 $ 81.8 $ 101.9 Stock-based compensation 3.1 2.0 5.5 3.1 Total selling, general and administrative $ 43.7 $ 51.4 $ 87.3 $ 105.0 Selling, general and administrative expenses for the three and six months ended June 30, 2026 decreased by $7.7 million and $17.7 million, or 15% and 17%, respectively, from the same periods in 2025. These decreases were primarily due to lower labor and non-labor costs resulting from cost control measures. Depreciation, Depletion, and Amortization Depreciation, depletion, and amortization for the three and six months ended June 30, 2026 decreased by $7.7 million and $16.6 million, respectively, from the same periods in 2025 due to certain assets becoming fully depreciated. Other Operating Expense, Net The following table summarizes our other operating expenses, net: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Litigation expenses $ 1.0 $ 2.8 $ 3.4 $ 4.4 Provision for credit losses, net of recoveries — 12.8 — 12.8 Field restructuring costs 1.6 — 1.6 — Transaction costs 0.1 7.0 0.4 7.2 Lease termination — 0.8 0.2 0.8 Severance charges — 0.4 — 0.4 Loss on disposal of assets, net 4.5 5.2 2.5 8.6 Total $ 7.2 $ 29.0 $ 8.1 $ 34.2 Litigation expenses generally represent legal and professional fees incurred in litigation as well as estimates for loss contingencies with regards to certain vendor disputes and litigation matters. In the periods presented, these costs primarily represent litigation costs incurred in connection with certain patent infringement lawsuits. Field restructuring costs in 2026 relate to the closure of a stimulation services field operations location in Vernal, UT. 29 The provision for credit losses for the three and six months ended June 30, 2025 primarily related to a revised estimate of the payments to be received from an insolvent customer. Transaction costs represent legal and professional fees incurred for strategic initiatives. Severance charges relate to the departure of certain highly compensated employees. (Gain) loss on disposal of assets, net consists of gains and losses on the sale of excess property, early equipment disposals and other asset dispositions. Interest Expense, Net Interest expense, net of interest income, for the three and six months ended June 30, 2026 was $33.2 million and $66.0 million, respectively, compared to $35.1 million and $71.0 million in the same periods in 2025. These decreases were due to lower average outstanding debt balances and interest rates in 2026. Other Expense, Net For the three and six months ended June 30, 2025, we recognized other expense, net of $9.7 million and $4.9 million, respectively. These amounts were primarily due to a $10.5 million loss on disposal of EKU Power Drives in the second quarter of 2025, which was partially offset by a decrease in the fair value of our Munger make-whole provision in the first quarter of 2025. Income Taxes Income taxes expense was $5.2 million and $4.7 million for the six months ended June 30, 2026 and 2025, respectively. Our effective tax rate for the six months ended June 30, 2026 was negative 3.5%, compared with negative 4.0% in the same period in 2025. For the six months ended June 30, 2026, the difference between our effective tax rate and the federal statutory rate related to changes in the valuation allowance on our net deferred tax assets. For the six months ended June 30, 2025, our income tax provision included a discrete expense of approximately $4 million related to a book-tax difference on the sale of certain gas conditioning equipment to Flotek. Excluding this discrete item, the difference between our effective tax rate and the federal statutory rate related to changes in the valuation allowance on our net deferred tax assets. Liquidity and Capital Resources Sources of Liquidity Historically, our primary sources of liquidity are cash flows from operations and availability under our revolving credit facility. In the three months ended March 31, 2026, we issued $25.0 million of 2029 Senior Notes. While Flotek is included in our unaudited condensed consolidated financial statements, we do not have the ability to access or use Flotek’s cash or liquidity in our operations and, accordingly, have excluded Flotek’s cash and other sources of liquidity from the following discussion of our liquidity and capital resources. See "Note 1. Organization and Description of Business" in the notes to our unaudited condensed consolidated financial statements for discussion of our ownership of Flotek. Our Alpine 2023 Term Loan requires us to segregate collateral associated with Alpine and limits our ability to use Alpine's cash or assets to satisfy our obligations or the obligations of our other subsidiaries. We have limited ability to provide Alpine with liquidity to satisfy its obligations. Refer to our Annual Report and "Note 4. Debt" in the notes to our unaudited condensed consolidated financial statements for more information regarding the Alpine 2023 Term Loan. At June 30, 2026, we had $14.4 million of cash and cash equivalents, excluding Flotek, and $57.6 million available for borrowings under our previous revolving credit facility, which resulted in a total liquidity position of $72.0 million. On July 1, 2026, we entered into a new revolving credit facility. See “Note 14. Subsequent Events” in the notes to our unaudited condensed consolidated financial statements for more information regarding our new revolving credit facility. At July 1, 2026, we had $70.6 million available for borrowings under our new revolving credit facility. 30 We believe that our cash and cash equivalents, cash provided by operations, and the availability under our new revolving credit facility will be sufficient to fund our capital expenditures, satisfy our obligations, and remain in compliance with our existing debt covenants for at least the next 12 months. The market for our services is cyclical and if our customers unexpectedly reduce activity levels or the pricing of our products and services unexpectedly declines, we may need to take action to improve our liquidity, which may include selling assets or seeking additional sources of capital. There can be no assurance that any such additional liquidity enhancements will be available, or if available, that they will be on terms acceptable to us or our stakeholders. In addition, Alpine is closely monitoring its forthcoming debt covenant compliance obligation that commences in the fiscal quarter ending March 31, 2028. While there can be no assurance, Alpine believes that it will be able to meet, modify, or further defer this debt covenant. See “Note 4. Debt” in the notes to our unaudited condensed consolidated financial statements for more information about this forthcoming debt covenant. Cash Flows Cash flows provided by (used in) each type of activity were as follows: Six Months Ended June 30, 2026 2025 Net cash provided by (used in): Operating activities $ 32.2 $ 135.4 Investing activities (65.3 ) (94.2 ) Financing activities 51.1 (30.0 ) Net change in cash, cash equivalents, and restricted cash $ 18.0 $ 11.2 Operating Activities. Net cash provided by operating activities was $32.2 million and $135.4 million for the six months ended June 30, 2026 and 2025, respectively. Cash flows from operating activities consist of net income or loss adjusted for non-cash items and changes in net working capital. Net income or loss adjusted for non-cash items for the six months ended June 30, 2026 resulted in a cash increase of $54.9 million compared with a cash increase of $116.8 million in the same period of 2025. This change was primarily due to lower earnings in 2026. Changes in net working capital for the six months ended June 30, 2026 resulted in a cash decrease of $22.7 million compared with a cash increase of $18.6 million in the same period in 2025. Investing Activities. Net cash used in investing activities was $65.3 million and $94.2 million for the six months ended June 30, 2026 and 2025, respectively. This change was primarily due to decreased capital expenditures in 2026. Financing Activities. Net cash provided by financing activities was $51.1 million for the six months ended June 30, 2026, compared with cash used by financing activities of $30.0 million for the same period in 2025. This change was primarily due to increased net borrowings in 2026. Cash Requirements Our material cash requirements have consisted of, and we anticipate will continue to consist of the following: •debt service obligations, including interest and principal; •capital expenditures; •purchase commitments; •tax receivable agreement payments, and •acquisitions of strategic businesses. Debt Service Obligations As of June 30, 2026 we have $1,102.4 million in aggregate principal amount of long-term debt outstanding, with $165.3 million coming due over the next twelve months. For additional information about our long-term debt, see "Note 4. Debt" in the notes to our unaudited condensed consolidated financial statements and Item 8 "Financial Statements and Supplementary Data" in our Annual Report. 31 Both the 2029 Senior Notes and our revolving credit facility contain certain customary representations and warranties and affirmative and negative covenants. As of June 30, 2026, we were in compliance with these covenants and expect to be compliant for at least the next twelve months. The Alpine 2023 Term Loan contains a covenant commencing with the fiscal quarter ending March 31, 2028, requiring Alpine not to exceed a maximum Total Net Leverage Ratio (as defined in the Alpine Term Loan Credit Agreement) of 2.00 to 1.00. This ratio is generally the consolidated total debt of Alpine divided by Alpine's adjusted EBITDA. Alpine is closely monitoring its forthcoming compliance obligations with this covenant. While there can be no assurance, Alpine believes that it will be able to meet, modify, or further defer this debt covenant. Capital Expenditures The nature of our capital expenditures consists of a base level of investment required to support our current operations and amounts related to growth and company initiatives. During the six months ended June 30, 2026 our capital expenditures were $72.4 million, consisting of maintenance capital expenditures for our hydraulic fracturing fleet, upgrades to legacy pumps, expenditures to maintain efficient operations at our sand mines, and investments in next generation technology. For the full year of 2026, we estimate capital expenditures will range from $100 million to $120 million in maintenance related expenditures and an additional $55 million to $65 million for growth initiatives. Growth initiatives in 2026 relate to upgrades to our hydraulic fracturing fleet, investments in next generation technology and sand mine improvements. We continually evaluate our capital expenditures and the amount that we ultimately spend will depend on a number of factors, including our liquidity position, customer demand for fleets, and expected industry activity levels. Purchase Commitments As of June 30, 2026, we had purchase commitments of $0.9 million in 2026, $1.6 million in 2027, $1.6 million in 2028, and $0.3 million in 2029. Tax Receivable Agreement As of June 30, 2026 we have $86.7 million of estimated tax receivable agreement obligations, with an estimated $4.7 million coming due over the next twelve months. This obligation will generally be paid under the tax receivable agreement as the Company realizes actual cash tax savings from the tax benefits covered by the tax receivable agreement in future tax years. We do not expect a significant increase in the estimate of this liability in future periods. For additional information about our tax receivable agreement, please see Item 8 "Financial Statements and Supplementary Data" in our Annual Report. Acquisitions of Strategic Businesses Our growth strategy includes potential acquisitions and other strategic transactions. From time to time we enter into non-binding letters of intent as well as binding agreements to make investments or acquisitions. These arrangements may provide for purchase consideration including cash, notes payable by us, equity or some combination, the use of which could impact our liquidity needs. These letters of intent typically are subject to the completion of satisfactory due diligence, the negotiation and resolution of significant business and legal issues, the negotiation, documentation and completion of mutually satisfactory definitive agreements among the parties, the consent of our lenders, our ability to finance any cash payment at closing, and approval of our board of directors. Any binding agreements we may enter typically include customary closing conditions. We cannot guarantee that any such actual or potential transaction will be completed on acceptable terms, if at all. We have historically funded our acquisitions through issuances of our equity securities, borrowings under our credit agreements, and issuance of debt securities. For any future acquisitions, we may utilize borrowings under our revolving credit facility and various financing sources available to us, including the issuance of equity or debt securities through public offerings or private placements, to fund these acquisitions. Our ability to complete future offerings of equity or debt securities and the timing and terms of these offerings will depend on various factors including prevailing market conditions and our financial condition. 32